Lessons in Small Business - 5 things I've learned
I'm approaching the five-year mark from when I first started my business! I mean, cue the confetti, right?! In some ways that time has flown by, and in others, it has been a very long journey, full of failures and "if only I would have known" moments. Of course, there have been plenty of success as well, but I have to say, I've learned more about importance of my mistakes. If you are considering taking the leap into starting your own small business (or maybe you already have one, and want to check your own practices!), then take a look at these 5 key things I've learned over the course of two babies and a pandemic!
1. You should always, always have a business plan.
This seems really basic right? Like how do you even start a business without one? How dumb do you have to be? Well, apparently pretty dumb, because this is exactly how my business got its start, haha. At the time of course, it wasn't a business. Not yet. It was an idea spawned at 11pm on like a Tuesday night, that I got so excited by I couldn't sleep that night. Before morning, I had a Facebook business page and a logo. That's all you need to start a business, right? (Spoiler alert: just no!)
My "business" wasn't a business at all. It was an idea. And ideas are great. Especially if your idea is fueling your dream. But start at the beginning. Do your research. Take your time. Talk to your spouse (underlined, because I didn't even do that part!) your friends, your family, figure out how much time you can spend on your new venture, and how much money it is going to take to get it off the ground. Be realistic. Do all the steps and have all the important conversations. It feels like a buzzkill, but it is better to start your business with set expectations, rather than feeling like you are just winging it the whole time. I "winged" it for the first year and a half and trust me when I say I had so much more anxiety than if I just would have sat down and figured it out before I ever created that Facebook page. (My poor husband sure would have appreciated that as well!) It is hard enough being a business owner. Don't shoot yourself in the foot before you can even get off the ground.
I can say through a lot of trial and error, I do have a solid business plan that I've worked really hard at. Is it perfect though? Nope, I'm sure something will change again. Business planning NEVER stops. You may get to a certain point and realize you aren't making much of a profit and you need to raise your prices. Or maybe you grow so big that you need to open a second location or hire an assistant. Or maybe you want to take a two-week trip to Italy and you really need to increase your profits the next few months to make that happen. Or you have a baby on the way and now you need to figure out how to take a maternity leave without drowning your business in the meantime. Or maybe you grow too big, too fast, and need to figure out how to step back a bit so you don't get burned out. Do not lure yourself into the falsehood of, "oh, once I get this all set up, it will run itself." It is a lie I've told myself more than once, and it is simply never true. The sooner you can understand that your business is a growing, changing entity and it will always require your care, the better it (and you!) will be.
2. Do things the right way. I went into my business thinking, "Ok, it would be great to have 1-2 clients a month, just something to keep me occupied." 1-2 clients quickly turned into 4-5, which turned into 12, which turned into 20. Great, right? Go me! Except... wait. My husband thinks I'm only taking two clients this month and I'm going to need his help with the kids, and I need to purchase a few things for minis I planned, and I should probably be keeping track of my expenses, and wait, what do I do about paying taxes now?
There are so many helpful resources out there. Find a Facebook group with a ton of members in your industry - whether it be photography, hair and makeup, baking, crafting, apparel/fashion, jewelry making, flipping furniture, or selling your art - guaranteed there are other people out there doing exactly what you are trying to do and have been through all of these things already. Ask yourself - "Do I have everything I need to LEGALLY make a sale tomorrow?" If the answer is no, you are not ready.
At a minimum, you need to make sure you have:
Proper licensing, depending on what your craft is, this may be a certificate, something issued from a school or from the state, or maybe as simple as applying for a business license in your county. You will also need a federal tax ID number from the IRS. I know it's boring but DO the homework. Figure out exactly what you need. If there is a fee, pay it. Sometimes you do have to pay money to make money. And it's better to pay it right away than to be fined or have to pay extra legal fees later. No one wants that!
Business insurance. Do you have supplies/equipment that if they got stolen or caught on fire would really suck? Yes? Or will you be working with people face-to-face that if they sued you for some awful reason like they fell on your property, could be a big problem? All of this is what business insurance is for. Get it. Right away. I use State Farm, who also covers our cars and house. It was super easy to add a business policy and we update it annually based on my assets. If you are unsure of your assets and what should all be covered, talk to an agent!
Financial guidance. I am not an accountant, but I can tell you that you need to make sure you understand how paying your taxes will work as a small business owner and you need to have a way to track all of your income coming in and your expenses. If you are not an expert on this, hire an accountant - even if it is just for one consultation to help you understand your next steps. I see mine once every couple of years when I'm making big changes to my business. He helped me understand the importance of having an LLC, how to write off certain big-ticket items, and how to properly hire an assistant. He also does my taxes every year. Don't underestimate this one, because I can tell you from experience it is a lot harder to fix these types of things if you are already behind on them. Again, don't wait. When it comes to something as important as your finances, you want to be sure you understand everything involved.
A workspace. Where will you work? Do you need special permits? Do you need permission from anyone? Do you need to prep that space before you can start working? What materials and equipment do you need to purchase or upgrade, and can any of that wait until you start making money or will you have upfront expenses? Will you need to use a car for any business activities? Do you have a way to keep track of mileage? All of these questions need to be answered first, as part of your business plan.
This is a short list of some of the things that should be considered before ever creating that logo. Other things may include (depending on your industry): legal counsel, invoicing programs, having a way to track clients' projects, writing contracts, understanding if you need to charge sales tax or not, will you have employees, etc. Make sure you are 100% legal in your business.
3. Find your worth.
Fast forward a few months into my business. I am booming with clients. I am working for pennies, but who cares, when you are in such demand! It is a brand-new business, and I'm already making more than I was as a stay-at-home mom! (Another spoiler alert: still just no!!!)
I definitely didn't do my research when it came to pricing myself accordingly. When I first started out, my sessions were $30. Yes, $30. It sounded like a lot when I had just quit my day job a few months prior and didn't have any "extra" income coming in. My husband was the breadwinner, and I thought he would appreciate my "help". What I didn't realize was that $30, resulted in me being paid less than minimum wage by the hour. Far, FAR less. The time it would take me consult with the client, set up the set, actually take the pictures, cull the pictures, edit the pictures, send the pictures, troubleshoot any of that along the way since I just barely knew what I was doing, and then if I actually had to purchase something for the shoot... I wasn't making any money. That's not even including what was going to be taken out for taxes!
This is where I have spent the most time with trial and error. And in hindsight, I wish I would have just done my own homework to figure out my cost of doing business much sooner. If I would have done that in the very beginning, I would have seen the exact amount that I needed to make per hour to be profitable. Even if you think "well, I can't charge that much, I'm just starting out!" Yes, you can. You need to be profitable or your business doesn't stand a chance. You WILL get burned out otherwise. Figure out what you need to charge to make a sustainable income, and then from there, you can always increase your pricing as your skills grow. Which brings me to the next item on the list...
4. Clients will come and go.
It is a harsh reality, but it is true. As you grow and change (hopefully for the better!), so will your pricing. It is natural and to be expected. As a result, this will change your client base.
I can still remember the first time I logged onto Facebook and saw one of MY clients with family photographs not taken by me. Oh, my heart. It felt like I was getting broken up with, but publicly! How humiliating! I was overcome with rejection and feeling hurt, and full of self-doubt and negativity. But you know what? It had nothing to do with me. Maybe they wanted a different style than how I shoot. Maybe I had outpriced their budget. Maybe they felt someone else was better suited for this particular job than me. The reason ultimately doesn't matter (unless you are consistently losing clients, without changing your prices or your business plan - that's a different topic), but what does matter is that you are staying connected to who your ideal client is.
Is your ideal client a single woman, living life on the edge, or is she a stay-at-home mom with a gaggle of kids? Is she a career-minded, sophisticated woman? Is she artsy? What's her style? What's her budget? Where does she live? Where does she hang out? You get the drift! If you're losing clients that aren't meeting this ideal client picture in your head, try not to lose too much sleep over it. Does it suck? Yes. Rejection never feels good. (I still have that sinking pit in my stomach when I see a client has gone somewhere else, and I don't think that will ever be something that I'll outgrow!) But as you raise your prices and tweak your business plan, you should be narrowing down who this ideal client is, and hopefully attracting that person or family to your business using the right marketing and connections. There will always be someone out there who appreciates and values what you bring to the table. Don't sweat the ones who don't. (Or do the best you can!)
5. Trust yourself (and stop comparing yourself to others).
Have you ever felt really great about a talent or skill you have, and then saw someone do it better, and instantly feel small? I think everyone has at some point, whether it be a sport you've played or a talent you've had or something you've creatively done. I know in my highly-saturated, highly-competitive industry of photography, it is super easy to get drawn into what others are doing and feel less worthy about yourself as a result. It is everywhere! How do you feel "good enough" when it seems like there is always someone out there doing it better?
Here's my takeaway, after years of dealing with "imposter syndrome" - no one else can be you. It sounds so simple and cliched, but it is the truth. No one else has had your experiences, with your skillset, with your perception of the universe, with your personality, with your beliefs, and with your karma! Just you. And with that, you can choose confidence over timidness. You can choose positivity over negativity. And you can choose your uniqueness over following the herd.
It is great to see what others are doing for inspiration or to build each other up. I am a firm believer in community over competition. I find it extremely helpful to have friends in your industry, doing the same types of things you are doing, because this is where you will find your support at the end of the day. When you run into a problem with your business, yes, you can tell your spouse or your friends about it, but who better to understand than another business owner who has maybe gone through the exact same thing? Networking is so important. Stop seeing your competition as your competition. Instead ask, what can you learn from them? What can they learn from you? If you're wondering "how exactly do I make friends with my competition?", you can try a Facebook group with other like-minded business owners. Follow those who do quality work on Instagram. Attend conventions for your craft. Join mentoring groups. Or even just reach out individually and say hello, introduce yourself and see if they want to grab coffee sometime to talk business. They are probably eager for a friend in the industry, just like you are.
And remember, no matter how successful your "competition" is... they aren't you. Really, it's like comparing dolphins to whales. They both swim in the ocean, but totally different creatures. Find what sets you apart from everyone else - whether it be your awesome personality, or how good you are with kids, or your amazing location, or maybe you have impeccable styling and taste, or that you are really good at marketing yourself - what are your strengths? Where can you find your confidence, and hold onto it, while others *also* do amazing things? There is room for everyone to do amazing things - it doesn't have to be either/or! Celebrate yourself!
Running a small business is hard work and it is 24/7. Whether you are just taking flight or you have been airborne for a while now, your business is something that will always be changing and always requiring your energy to a certain degree. I've had times when I've felt on top of the world and times when I've felt like I was about to crash, but no matter what, I know this journey is worth it. When you find your dream, it is worth chasing after - just do it the right way, and hopefully you are able to learn from these little nuggets of wisdom, after a bunch of trial and error in my own endeavors!